Transformational leadership is defined as a leadership approach that causes change in individuals and social systems. In its ideal form, it creates valuable and positive change in the followers with the end goal of developing followers into leaders. Enacted in its authentic form, transformational leadership enhances the motivation, morale and performance of followers through a variety of mechanisms. These include connecting the follower's sense of identity and self to the mission and the collective identity of the organization; being a role model for followers that inspires them; challenging followers to take greater ownership for their work, and understanding the strengths and weaknesses of followers, so the leader can align followers with tasks that optimize their performance....
Transformational leadership is an approach to leadership that moves followers to transcend self-interest for the good of the organisation. Transformational leadership consists of six behaviours: articulating a vision; setting a positive example; communicating high performance expectations; showing sensitivity to individual followers’ needs; encouraging a team attitude; and providing intellectual stimulation. Research shows that groups led by transformational leaders boast higher levels of performance than groups led by other types of leaders. Transformational leaders' high expectations give their subordinates the self-confidence to persist in the face of setbacks, often resulting in exceptional performance.
A transformational leadership takes into account individual traits, organizational culture and characteristics. It also models leadership behaviors. It causes positive impact on followers and groups and increases outcomes. See the chart below:
source: Freddy Guevara
Transformational leaders are sometimes call quiet leaders. They are the ones that lead by example. Their style tends to use rapport, inspiration, or empathy to engage followers. They are known to possess courage, confidence, and the willingness to make sacrifices for the greater good. They possess a single-minded need to streamline or change things that no longer work. The transformational leader motivates workers and understands how to form them into integral units that work well with others.  Transformational leaders create a culture of active thinking through intellectual stimulation, and this culture encourages followers to become more involved in the organization (Tims et al., 2011).
Background on Transformational Leadership
The concept of Transformational leadership was initially introduced by leadership expert and presidential biographer James MacGregor Burns. According to Burns, transformational leadership can be seen when "leaders and followers make each other to advance to a higher level of moral and motivation." Through the strength of their vision and personality, transformational leaders are able to inspire followers to change expectations, perceptions, and motivations to work towards common goals. Later, researcher Bernard M. Bass expanded upon Burns's original ideas to develop what is today referred to as Bass’s Transformational Leadership Theory. According to Bass, transformational leadership can be defined based on the impact that it has on followers. Transformational leaders, Bass suggested, garner trust, respect, and admiration from their followers. Burns (1978) created the concept of transformational leadership as a description of political leaders who transform the values of their followers, but Bass (1985, 1990) later expanded the scope to include leadership within organizational settings. Since then, transformational leadership has become one of the most widely-studied leadership styles due to its emphasis on changing workplace norms and motivating employees to perform beyond their own expectations (Yukl, 1989). Transformational leaders are believed to achieve such results through aligning their subordinates’ goals with those of the organization and by providing an inspiring vision of the future (Bass, 1985).
Leadership expert James McGregor Burns introduced the concept of transformational leadership in his 1978 book, "Leadership." He defined transformational leadership as a process where "leaders and their followers raise one another to higher levels of morality and motivation." Bernard M. Bass later developed the concept of transformational leadership further. According his 1985 book, "Leadership and Performance Beyond Expectations," this kind of leader:
- Is a model of integrity and fairness.
- Sets clear goals.
- Has high expectations.
- Encourages others.
- Provides support and recognition.
- Stirs the emotions of people.
- Gets people to look beyond their self-interest.
- Inspires people to reach for the improbable. 
The Elements of Transformational Leadership
The full range of leadership introduces four elements of transformational leadership:
1. Individualized Consideration – the degree to which the leader attends to each follower's needs, acts as a mentor or coach to the follower and listens to the follower's concerns and needs. The leader gives empathy and support, keeps communication open and places challenges before the followers. This also encompasses the need for respect and celebrates the individual contribution that each follower can make to the team. The followers have a will and aspirations for self development and have intrinsic motivation for their tasks.
2. Intellectual Stimulation – the degree to which the leader challenges assumptions, takes risks and solicits followers' ideas. Leaders with this style stimulate and encourage creativity in their followers. They nurture and develop people who think independently. For such a leader, learning is a value and unexpected situations are seen as opportunities to learn. The followers ask questions, think deeply about things and figure out better ways to execute their tasks.
3. Inspirational Motivation – the degree to which the leader articulates a vision that is appealing and inspiring to followers. Leaders with inspirational motivation challenge followers with high standards, communicate optimism about future goals, and provide meaning for the task at hand. Followers need to have a strong sense of purpose if they are to be motivated to act. Purpose and meaning provide the energy that drives a group forward. The visionary aspects of leadership are supported by communication skills that make the vision understandable, precise, powerful and engaging. The followers are willing to invest more effort in their tasks, they are encouraged and optimistic about the future and believe in their abilities.
4. Idealized Influence – Provides a role model for high ethical behavior, instills pride, gains respect and trust. As a development tool, transformational leadership has spread already in all sectors of western societies, including governmental organizations. As an example, the Finnish Defence Forces is using widely Deep Lead© Model as basic solution of its leadership training and development. The Deep Lead© Model is based on the theory of transformational leadership.
Characteristics of a Transformational Leader
Five major personality traits have been identified as factors contributing to the likelihood of an individual displaying the characteristics of a transformational leader. Different emphasis on different elements of these traits point to inclination in personality to inspirational leadership, transactional leadership, and transformational leadership. These five traits are as follows.
- Extraversion: The two main characteristics of extraverts are affiliation and agency, which relate to the social and leadership aspects of their personality, respectively. Extraversion is generally seen as an inspirational trait usually exhibited in transformational leadership.
- Neuroticism: Neuroticism generally gives an individual an anxiety related to productivity which, in a group setting can be debilitating to a degree where they are unlikely to position themselves in a role of transformational leadership due to lower self-esteem and a tendency to shirk from leadership responsibilities.
- Openness to Experience: Creative expression and emotional responsiveness have been linked to a general tendency of openness to experience. This trait is also seen as a component of transformational leadership as it relates to the ability to give big-picture visionary leadership for an organization.
- Agreeableness: Although not a trait which specifically points to transformational leadership, leaders in general possess an agreeable nature stemming from a natural concern for others and high levels of individual consideration. Charisma and idealized influence is a classic ability of individuals who possess agreeability.
- Conscientiousness: Strong sense of direction and the ability to put large amounts of productive work into tasks is the by-product of conscientious leaders. This trait is more linked to a transactional form of leadership given the management-based abilities of such individuals and the detail oriented nature of their personality.
Whilst the Transformational Leader seeks overtly to transform the organization, there is also a tacit promise to followers that they also will be transformed in some way, perhaps to be more like this amazing leader. In some respects, then, the followers are the product of the transformation. Transformational Leaders are often charismatic, but are not as narcissistic as pure Charismatic Leaders, who succeed through a belief in themselves rather than a belief in others. One of the traps of Transformational Leadership is that passion and confidence can easily be mistaken for truth and reality. Whilst it is true that great things have been achieved through enthusiastic leadership, it is also true that many passionate people have led the charge right over the cliff and into a bottomless chasm. Just because someone believes they are right, it does not mean they are right. Paradoxically, the energy that gets people going can also cause them to give up. Transformational Leaders often have large amounts of enthusiasm which, if relentlessly applied, can wear out their followers. Transformational Leaders also tend to see the big picture, but not the details, where the devil often lurks. If they do not have people to take care of this level of information, then they are usually doomed to fail. Finally, Transformational Leaders, by definition, seek to transform. When the organization does not need transforming and people are happy as they are, then such a leader will be frustrated. Like wartime leaders, however, given the right situation they come into their own and can be personally responsible for saving entire companies.
How Transformational Leadership Works
Transformational leadership theory makes the following assumptions about how the process of leader-follower engagement works. We might call these the rules of engagement.
- The Source and Focus. First, at the headwaters of transformational leadership is a compelling vision and a configuration of core values, not tasks or goals. When transformational leaders engage potential followers with a credible and compelling vision, shared values, and the high performance expectations attached to these, the cumulative effect of this engagement results in substantive change, indeed a transformation of moral and ethical dimension in the lives of both followers and leaders. Leaders and followers not only engage each other. They also engage the vision and values that have brought them together in the first place. As a result, a powerful environment, an ethos is created not only for the mutual exchange of valued commodities, but beyond this for a process of mutual, transformational engagement.
- The Person. Second, the person doing the transformational leading must be in the process of transformation himself or herself. Of necessity, the transformational leader will increasingly manifest a critical mass or configuration of interdependent personal attributes, what I call core essential capacities. Transformational theorists call these the 4-I’s;
(1) idealized influence (charisma),
(2) inspirational motivation,
(3) intellectual stimulation, and
(4) individualized concentration. The transformational leader must first and foremost be a transformational partner and this requires that the leader be caught up in a process of personal transformation in accordance with the vision and values he or she espouse.(Bernard Bass, “Does the Transactional-Transformational Leadership Paradigm Transcend organizational and National Boundaries?” American Psychologist, February, 1997, pp. 130-139).
- Qualitative and Quantitative Outcomes. Third, as a result of the mutual, substantive and ongoing transformation of leaders and followers, agendas are indeed accomplished (e.g., important tasks and goals are achieved), but beyond these a series of transformational outcomes is secured on behalf of the community. By definition, vision and value driven results flowing from a transformational engagement are inherently unpredictable and thus uncontrollable. But, nonetheless, a pattern of “beyond expectation” outcomes is set in motion. Congruent with and reflective of the vision and values of the community, this pattern of results is imbued with an ethical quality which transcends the limitations of a task oriented, leader-follower transaction (Bernard Bass, Leadership and Performance Beyond Expectations, New York, Free Press, 1985).
- Community Impact. Fourth, this chain reaction of “beyond expectation” results is a catalyst for the transformation not only of individual followers and leaders, but also the broader community. Both followers and leaders covenant together not only to get important things done, but also to transcend the limitations of self-interest and task oriented exchanges for the higher and more meaningful outcomes mandated by the community’s vision and values. Leaders and followers in transformational partnership engage one another and the community in a change process that addresses “higher-order outcomes” in the arena of community culture, values and ethics. The focus is not only what do we want to accomplish today, but who do we want to become tomorrow.
- An Ongoing Community Process. Fifth, transformational leaders and followers serve not only as catalysts for a chain reaction of “beyond expectation” performance. They also serve as social architects, creating and sustaining the transformational community and embodying and shaping the emerging community ethos. The ultimate aim of the transformational leader, his or her highest leadership act, is to create and sustain a community culture, which embodies the ethos, values and vision of the community, and fosters high performance expectations (an extra mile mind set) in service of the vision and values. In short, transformational leaders create, sustain and enlarge healthy transformational communities. As more and more followers become transformational leaders and more and more transformational leaders become catalysts for vision and value-driven transformation in the community, substantial and ongoing change is initiated and sustained on the level of community ethos and culture. A trajectory of community transformation, substantive change according to the ethical and spiritual imperatives of the community, is now deeply embedded n the daily life of the community, defining its unique ethos and flavor, and shaping the hearts and habits of each person in the community. The end result is a substantively healthy (certainly not perfect) transformational community with the capacity to enlarge its reach and serve those beyond its borders as its vision and values dictate.
Transformational Leadership and Performance
At the time of its inception, one of the most promising aspects of transformational leadership was its hypothesized relationship with employee performance (Bass, 1985). Nearly three decades of transformational leadership research has supported this hypothesis, and several more recent meta-analyses have lent strong evidence to the idea that followers of transformational leaders display high levels of performance (see: DeGroot, Kiker, & Cross, 2000; Judge & Piccolo, 2004; Wang et al., 2011). However, along with the proliferation of research on this topic has come a desire to know why transformational leaders bring about higher levels of performance. Though there are a number of different theories as to how transformational leaders elicit above-average performance from their followers, there exist some commonalities throughout the literature. These common findings have mainly focused on the idea that transformational leaders increase their followers’ levels of motivation by igniting personal change within them. For example, Bass (1997) claims that transformational leaders boost their followers’ sense of selfworth through treating each follower as an individual (individualized consideration) and by framing their work as meaningful (intellectual stimulation). This sense of self-worth that transformational leaders nurture is a key motivator that acts to commit the follower to a specific performance goal (Shamir, 1991). Additionally, Bass and Avolio (1993) found that transformational leaders increase their followers’ levels of motivation and self-efficacy through inspirational appeals (inspirational motivation) and clear communication of high performance expectations (idealized influence). These leader behaviors establish organizational norms that foster follower initiative, achievement-oriented behaviors, and goal-attainment (Masi & Cooke,2000), thereby leading to a culture of employee empowerment (Harrison, 1995). Previous transformational leadership research has focused on follower performance on a variety of tasks over time, which although referred to as task performance in that it deals with core job duties (Wang, Law, Hackett, Wang, & Chen, 2005), is not the same as performance on a specific task, which fails to incorporate variety over time. This distinction is crucial because follower performance could very well taper off based on how the task is presented by his or her leader. Therefore, the idea that transformational leaders influence their followers to achieve outstanding performance appears to be substantiated, but much less is known as to whether these leaders can successfully influence their followers to achieve exceptional performance on specific, day-to-day tasks. Larsson and Lundholm (2010) lament the lack of leadership research focusing on everyday interactions, claiming that leadership is nurtured through such discursive moments between leader and follower. The following section explores why this gap in the literature may exist, as well as why examining this relationship may be useful from a practical and theoretical perspective.
Pro's and Con's of Transformational Leadership Theories
- Transformational leadership theories emphasizes the task and organizational integrity and this helps focus one's attention to more appropriately defining a task.
- The transformational theories emphasizes cooperation, ethics and community in addition to the higher human values.
- Long-range goals are emphasized which leads to increasing the survivability of a system.
- It has been showed in studies, such as in gaming theory, that cooperation, as opposed to competition, is more successful in achieving goals.
- Transformational leadership theories are adaptive and can be tailored to support the fulfillment of the most pressing of needs in people.
- There is greater stability of a leader's position, as there is greater support by those who are being led.
- Transformational leadership theories can bring harmony to a situation that could otherwise be exacerbated by a quarrelsome organization.
- If one has an educated population, transformational leadership theories are more likely to work.
- Even if everyone is motivated to do a task it does not assure a successful completion of that task. Over-enthusiasm for the leader may cloud the group's judgment as to whether the objectives of an organization are realistic.
- There can be over-dependence upon the leader.
- Members of the organization may resent that their ability to act as individuals has been restricted.
- People have different personalities, and some may be more ambitious than others may, with the latter feeling as if they are being pushed beyond their capacities.
- Some individuals may work better as individuals as opposed to collaborating in a team environment.
- There may be cases when it is difficult to assess whether there is cooperation or mere conformity. People may want simply to "go along to get along".
- There is the danger of the presence of personality cults, where a leader is so revered that s/he is only the personality that drives activity.
- The enormity of a task and a fractious or highly competitive environment may compromise the ability of a leader, applying the concepts of transformational leadership theories, to gain consensus.
Transformational Leadership vs. Transactional Leadership
Transformational leadership can be contrasted with transactional leadership. The latter implies leadership based on an exchange process wherein autonomous agents may benefit, which in turn implies reciprocity (Simola et al., 2012). Bass (1990) indicates that transactional leadership can be characterized by several elements not necessarily mutually excluding. The first dimension is that of contingent rewards or the recognition of achievement by rewarding efforts and good performance. The second is active management by exception which is directed at managing the process. Leaders monitor the lack of compliance with established rules and standards, and when required undertake corrective measures. Transactional leadership can also focus on passive management by exception. In the latter, leaders are meant to intervene only in cases in which set objectives are not achieved. The last characteristic of transactional leadership is laissez-faire in which leaders avoid making decision and those involved in the process relinquish all responsibilities. Wang and Howell (2010) argue that transformational leadership can be focused on the individual and group levels. In the first instance, the aim is to empower individuals in order to “develop their full potential, enhance their abilities and skills, and improve their self-efficacy and self-esteem.” The influence of the leaders is strengthened by their interest in the followers as individuals. Transformational leaders strive to understand employees’ abilities, skills, and needs, and offer them coaching and mentoring to overcome any weaknesses. At the group level, transformational leadership develops common values and beliefs, and inspires unity in order to reach group goals. In this situation, leaders behave equally toward all members of the organization, and the latter have a common perception about the leader’s behavior. Scholars make further distinctions in leadership styles by elaborating on some of the components of Bass’ taxonomy. Chu et al. (2009), for example, elaborate the concept of charismatic leadership. This is a value-based style that leads to emotional bonds between leaders and followers. The latter transcend their self-interests because of their belief in a collective purpose. Such transcendence results from the followers’ identification and internalization of the vision and values of the leader. A charismatic relationship thus implies trust, respect, admiration and commitment to the leader. Charismatic leadership is an empowering style with a view to the future of the organization (Conger and Kanungo, 1998; cited in Eagly et al., 2003). According to Murphy and Ensher (2008) charismatic leaders achieve targeted transformation because of the following characteristics: “strategic visioning and communication behavior, sensitivity to the environment, unconventional behavior, personal risk, sensitivity to organizational members’ needs, and deviation from the status quo.” Similarly, Eagly et al. (2003) further distinguish laissez-faire leadership and indicate that this type of leadership is characterized by the avoidance of any involvement in critical situations and the “general failure to take responsibility for managing.”
Examples of Transformational Leadership
Transformational leaders excel in a variety of sectors. Here are notable business leaders who used the transformational style.
- William Edwards Deming: William Edwards Deming is known as the father of statistical quality control. After earning a doctorate in mathematics and physics at Yale in 1928, he spent most of his career working or consulting for the U.S. government. During World War II, Deming taught statistical process control techniques to military production workers. After the war ended, the U.S. Department of the Army sent Deming to Japan to study agricultural production and related problems. He convinced Japanese officials of the potential for industrial uses of statistical methods. Deming’s goal was to have Japan become a world industrial power in five years. Japan did it in four. Deming was asked to do the same thing for U.S. manufacturing firms, but his methods did not take root until the 1980s.
- Peter Drucker: Peter Drucker was a professor and management consultant among other things. He predicted some of the 20th-century’s biggest changes, such as the Japanese rise to a world economic power, the age where people would need to learn in order to keep their jobs or get ahead, and the importance of marketing and innovation. He coined the term “knowledge worker.” Drucker continually called for balanced management, which called for a balance between short-term needs and long-term plans, as well as profitability and other elements of business. He was very interested in how to mesh innovation and entrepreneurship. He felt that entrepreneurship was a vehicle of innovation. Entrepreneurship was not just high technology, but high tech was a vehicle for change, in attitude, values, and behavior. The entrepreneur systematically looked for change, responded to them and took advantage of opportunities as they present themselves.
- Ross Perot: H. Ross Perot started his career as a salesman for IBM. In the 1960s he started his own company, Electric Data Systems (EDS), one of the first businesses that built and serviced computer systems for other companies. In contrast to IBM, Perot trained his workers to do whatever needed to be done for a customer without waiting for approval. There was a strong bias toward action. In the beginning, Perot shunned strategic planning. Over the next few years, however, he hired military officers who could take orders and give orders. Perot’s slogan was “Go, do.” If an employee took credit for someone else’s work, they were out the door. The motto of Perot’s company at one point was “We bring order to chaos.”
- John D. Rockefeller: John D. Rockefeller was the founder of Standard Oil. It started as a single oil refinery and grew to a huge company. Much of the company’s growth came through acquisitions. But, Rockefeller also spent a considerable amount of time streamlining the organization as it grew. Rockefeller built his company’s early reputation by guaranteeing the quality of Standard’s kerosene. He was known for his organizational tactics and for using disciplined strategies. One of the reasons for Rockefeller’s success was he could align his company with one simple vision, then he held everyone accountable for their part in making that vision happen.
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